• DPOR Consumer Guide: Hiring A Contractor

    Avoiding Home Improvement Scams

    Your home is likely to be your most valuable financial asset. So be extra careful when you hire someone to work on it.

    Tips for Hiring a Contractor

    • Deal only with a licensed contractor who meets state requirements for expertise and performance.
    • By hiring a licensed contractor, you may be eligible for monetary relief from the Contractors Transaction Recovery Fund in case of improper and dishonest conduct.
    • Verify license status and check any past disciplinary actions using License Lookup, or contact the Board for Contractors.
    • Contractor licenses are issued to business entities (not individuals) and consist of two parts: the class of license, which determines the monetary value of contracts/projects that may be performed (Class A, B, or C), and the classification/specialty, which determines what type of work the contractor is licensed to perform.
    • Ask friends and neighbors for contractor referrals. An advertisement in the Yellow Pages or on TV isn't necessarily a good indication of the quality of a contractor's work.
    • Get written estimates from several contractors. Don't automatically choose the lowest bidder. Ask for explanations on price variations among proposals.
    • Insist on a detailed contract, including agreed-upon start and finish dates. Licensed contractors are required by law to provide a contract for residential work.
    • Don't rely on verbal agreements. Get all guarantees, warranties, and promises in writing.
    • Don't pay 100% of the bill until the work is 100% complete.
    • Limit your down payment or deposit. A reputable contractor should be able to front the costs of most supplies without a large sum of money from you. A deposit of one-third (30%) of the total cost is a good rule of thumb.
    • Try to make payments during the project contingent upon completion of certain tasks--that way, if the contractor is behind schedule, your payments are delayed.

    Tip-Offs to Potential Rip-Offs

    Not all contractors operate within the law or regulations.

    Here are some warning signs. Watch out for scams or an unlicensed contractor who:

    • Solicits door-to-door
    • "Just happens" to have materials left over from a previous job
    • Pressures you into making an immediate decision
    • Asks you to pay for the entire job up-front
    • Only accepts cash payments
    • Asks you to obtain required building permits
    • Doesn't list a business number in the local phone book

     

    For more information about contractor licensing, visit the Board for Contractors website.